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Informist, Wednesday, Apr. 9, 2025

--RBI Malhotra: We don't target any particular level of rupee 

--RBI Malhotra: Don't think under any stressful position on rupee 

--RBI Malhotra: Our currency is quite stable, have sufficent reserves

--RBI Malhotra: Intervene to prevent disruptive volatility in FX market 

--RBI Malhotra: Intervene to prevent exccessive volatility in FX market 

--RBI Malhotra: Difficult to say what exchange rate will be going forward 

MUMBAI – The rupee is "quite stable...and don't think we are under any stressful position", Reserve Bank of India Governor Sanjay Malhotra said at a post-policy press conference, while answering a question to how the RBI will manage in case of competitive devaluation of emerging market currencies due to different amount of tariffs imposed by the US. Further, the RBI expects very little pressure on the Indian currency from the ongoing tariff war, the governor said.

He further said the central bank does not target any particular level of the currency while intervening. "In so far as the currency management is concerned...we do not intervene in the currency management, it's only for excessive or disruptive volatility that we do so, we do not try to manage or target any reach or band or level of the Indian rupee," Malhotra said at a post-policy press conference.

It is very difficult to say what the exchange rate would be going forward, Malhotra said. So far this month, the rupee has depreciated about 1.2% against the US dollar, with the fall this calendar year at 1.1%

Malhotra said India's foreign exchange reserves were sufficient. "We have sufficient reserves, almost $700 billion now, inching up over there, and our deficits are very sustainable both this year and going forward next year," Malhotra said at the press conference. India's foreign exchange reserves hit a five-month of $676.3 billion as on Friday.

Earlier, in his policy speech, the governor said that India's net services and remittance receipts were expected to remain in large surplus, partly offseting the trade deficit. The current account deficit "for 2024-25 and 2025-26 are expected to remain well within the sustainable level", Malhotra had said.

Gross foreign direct investment remained strong during April 2024 to January, reflecting India's strong macroeconomic fundamentals. "Net FDI, however, moderated sharply during this period due to higher repatriations and outward FDI," Malhotra said in the policy speech. Supported by debt inflows, he said net FPI inflows to India stood at $1.7 billion during 2024-25. External commercial borrowings and non-resident deposits witnessed higher net inflows compared with last year, Malhotra said.  End

US$1 = INR 86.58

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Sourabh Kumar

Edited by Avishek Dutta

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